Thursday, August 23, 2012

'Mitt Romney is the National Enquirer's Banker' and other revelations

Somebody found nearly 1000 pages of internal financial documents related to Mitt Romney ... and gave them to Gawker.

Mitt Romney's $250 million fortune is largely a black hole: Aside from the meager and vague disclosures he has filed under federal and Massachusetts laws, and the two years of partial tax returns
(one filed and another provisional) he has released, there is almost no
data on precisely what his vast holdings consist of, or what vehicles
he has used to escape taxes on his income. Gawker has obtained a massive
cache of confidential financial documents that shed a great deal of
light on those finances, and on the tax-dodging tricks available to the
hyper-rich that he has used to keep his effective tax rate at roughly
13% over the last decade.

Today, we are publishing more than 950
pages of internal audits, financial statements, and private investor
letters for 21 cryptically named entities in which Romney had
invested—at minimum—more than $10 million as of 2011 (that number is
based on the low end of ranges he has disclosed—the true number is
almost certainly significantly higher).

Not that anyone at Gawker necessarily knows how to interpret such a massive data dump, but that's what crowdsourcing is for. Now, how politically relevant is this? I sincerely doubt there's anything illegal going on here. But it's a great glimpse into how wealth like Romney's is kept out of the spotlight, and out of reach for both the IRS and plebes like you and me.

How do you know what IRS has seen and hasn't seen? We don't even know if Romney was audited. Talk to GregJ and ask him what he knows about the chances of guys with big, complicated financial dealings getting audited.

As far as that 13% effective tax rate, if you use a tax program (I do), it tells you your effective tax. If you have a lot of debt (like me) and high property taxes (like me), you'll find that your effective tax rate may be surprisingly low.

"As far as that 13% effective tax rate, if you use a tax program (I do), it tells you your effective tax. If you have a lot of debt (like me) and high property taxes (like me), you'll find that your effective tax rate may be surprisingly low."

Agreed, most people think about their marginal rate, which is certianly much higher than 13%, and don't think about what they actually pay.

BUT that 13% for Romney includes his FICA and Medicare taxes, which I am certain make up a substantial piece of your federal tax bill. Heck, if you're self-employed and make about $100k (a decent living in most of the country) you pay MORE than 13% just in FICA and Medicare. So you could zero out your FIT and still pay a higher total federal tax rate than Romney.

News Flash: Mitt Romney is wealthy and pays 13% !
And here I thought I was going to read something important.
The economy is in poor shape and you want to bash a guy because he is wealthy. If he can make money I am all for him.

Romney's dad was a pioneer in transparency and released 12 years of tax returns in a run for office. Mitt Romney is a pioneer of secrecy, outsourcing jobs to China and stashing cash in tax heavens.

Question for Mitt "Let Detroit Fail" Romney: How is a giving tax cut to a Wall Streeter who peddles exotic financial derivatives and stashing the moneys in tax havens creating jobs for America?

See the bigger picture here is that the Romney campaign and Republicans in general, have no policy positions to offer other than that of the tired rhetoric that, "tax cuts and deregulation" are the answer to the problems with our economy. It's obvious by now that cutting taxes for the rich did not create jobs and the war in Iraq was a huge unnecessary burden on the US tax payer. There’s a huge chunk of the national debt right there.

I think there is a reason the Republican Party cannot find a good candidate for president. No intelligent, moral person can stand in front of the world and say the ridiculous things needed to obtain the support of the radical and confused wing of today's Republican base of voters.

It’s like Mark Twain wrote, “Hain't we got all the fools in town on our side? And ain't that a big enough majority in any town?”.

No it's not. Romney is going to have to give something in this election and he just doesn't seem to be willing to concede anything. Oh and by the way, tax cuts for the rich don’t create jobs. Look at the Romney tax proposals. Romney wants to give himself a tax break while raising taxes on the middle class. It's all there right in front of us.

Well it's the only thing Romney can talk about seeing that his 14 years at Bain (off shoring of US labor force) and 4 years as Massachusetts governor (Obamacare) are negative talking points.

Here's Romney's pitch to the voters, "I am a tax dodging, draft dodging, stiff, boring corporate puppet. I have been running for President since 1994, America. I am owed this."

And I am certain that Romney did nothing illegal since he would have been indicted by Eric Holder months ago – unless our President and Holder have an October surprise for us.

Raise your hand if you believe the rich should voluntarily pay more than they legally owe. And then in 500 words or more – tell us why. I need a laugh.

Looking at a recent ECON 101 book I see 2006 figures from the Congressional Budget Office. I note that the top 1% earns 18.8% of all income earned in the U.S. and pays 28.3 % of all federal taxes paid in the U.S. It appears that they are paying far more than their fair share. Thank god for the rich.

At law firms the associates are graded on their billable hours – which easily translate into how much money they brought in. (I know that they are graded in a minor way – on a few other things – but let’s not cloud the issue.) Money brought in by associates or money paid by tax payers is the real measure of things. Dollars are real. I just do not understand why this percentage stuff – effective tax rates is so important.

Romney advocates closing tax loopholes and at the same time lowering tax rates for the rich so as to keep the aggregate tax burden of the rich the same. Do I have this correct?

I all for privacy. Thus I have little desire to know about anyone’s Federal Income Taxes. I am not a voyeur. I am not envious. Are the liberals/progressives envious? If not, then why is Ms.Crepeau interested in this stuff?

I do not want to play the holier than thou card against anyone – but we really should not speculate in public about hunches regarding the criminality and/or patriotism of anyone -- at least not without some hard evidence.

I wonder why Obama did not get rid of these "tax dodging tricks available to the hyper-rich" or even propose getting rid of them when he controlled both houses of Congress. To the best of my recollection, he never proposed the "Buffett Rule" until long after he lost control of Congress and there was no chance it would ever pass. Maybe tax increases on the rich are just an issue he wants to demagogue and please his kook-left base with. He talks a lot about it but he somehow manages to never actually accomplish it.

Are you saying the president and his family didn't use "tax-dodging tricks" -- some of us "plebes" call them "deductions" and use them quite liberally and legally -- to reduce their tax burden? That's right: many of those "tax-dodging" tricks are available not only to the "hyper-rich" but to us plebes as well.

Romney had an effective 2010 income tax rate of just of 13%, and he estimates the same for 2011. Obama's effective income rate was 19% (after making full use of nearly $300K in deductions mind you). 47% of this country has an effective tax rate of 0% -- and in lower-income brackets it's negative.

The president could have left his deductions on the table but legally chose not to do so. Romney has every right to make the same decision.

"Romney had an effective 2010 income tax rate of just of 13%, and he estimates the same for 2011. Obama's effective income rate was 19% (after making full use of nearly $300K in deductions mind you). 47% of this country has an effective tax rate of 0%"

Apples and oranges. The 47% number counts *only* FIT, the others are coutning all federal taxes.

"Maybe tax increases on the rich are just an issue he wants to demagogue and please his kook-left base with."

It pleases you, doesn't it?

"How does this square with your other mantra around here that Obama is a far-left Marxist, socialist commie? Which is it?"

It has to do with his basic belief about how the individual relates to the state. In his "You didn't build that" speech, Obama stated his philosophy -- similar to that of Elizabeth Warren -- that anything you earn rightfully belongs to the government and that you can have any portion of your earnings that the government deigns to let you keep.

Let's suppose you consider the designated hitter an abomination against all that is holy. If you are an owner of an American League team, you campaign against it but you don't tell your manager to send the pitcher up to bat unilaterally.

I would be fine with Mitt Romney saying, "The tax laws available to rich people like me are a scandal and, if elected, I will work to change them but I am neither an idiot nor someone into gestures that cost me real money while making an imperceptible difference to the federal treasury." That, by the way, is basically the Bill Clinton / Barack Obama position.

"Let's suppose you consider the designated hitter an abomination against all that is holy. If you are an owner of an American League team, you campaign against it but you don't tell your manager to send the pitcher up to bat unilaterally."

Very well put.

"That, by the way, is basically the Bill Clinton / Barack Obama position."

The Simpson-Bowles Commission proposed getting rid of a lot of tax loopholes in return for lowering marginal rates but Obama thumbed his nose at it.

--One of the few things I like about Romney is that he has done a good job at keeping his money away from the government, which would do harm with it.

I have no reason to doubt that his tax planning is legal and if you want to blame anyone, blame the corporate cronyists in both parties who continue to make the tax code so convoluted and full of holes that people like me have an easy time getting low effective tax rates for rich corporations and individuals. I laugh when Congress claims it is passing new legislation to take away a loophole or set of loopholes because: (a) a lot of the time it's because they want to "pay for" a new loophole; and (b) the fixes that they put in place open up a whole can of unintended consequences that taxpayers can use to their advantage.

@Dphelan,

I agree that Republicans have not found a good candidate for president in 28 years. I'll give you that one. I disagree with your reasoning though. The reason is that the GOP still has an establishment that is stuck in the past and pushes moderates like Dole, McCain, Romney and the Bush family over good conservatives like Kemp, Gramm, Paul, and Santorum. The GOP has no one to blame but itself for its troubles.

So you're admitting you don't actually know what it is you're always spouting about. Because actually being a far left liberal is far different than pretending to be one to get liberal voters. You really should decide on what your narrative is - you can't have it both ways.

I actually agree with you. The government shouldn't be giving money to political parties just as it shouldn't be giving money to corporations. $36 million for yet another moderate stiff isn't a good value in any event.

Chris: Yes, I agree with you on your remark re the difference between effective tax rate and fed income tax rate: The former includes FICA/Medicare, the latter doesn't.

However, the point still has force. People charged for FICA/Medicare are getting a great product that you could never buy in the private sector (primarily because, for Soc Sec at least, anybody offering it would be sent to jail).

So, the fact is, they aren't paying anything out of their income for the ordinary upkeep of the federal government. Unless, of course, their FICA/Med taxes are being spent in the ordinary course of business by the feds, but the government would never do that.

See, this is what I don't understand. If it's the latter (Obama's only pretending to be a leftie to fool gullible liberals), why *wouldn't* you support him? He's actually doing most of what Bush was reviled for, yet liberals love him - what's not for you conservative types to love about him?

"He's actually doing most of what Bush was reviled for, yet liberals love him - what's not for you conservative types to love about him?"

Let us say, for the sake of argument, that that is true. If I were to vote for him, I would be validating what he claims to stand for. He would interpret my vote as part of a mandate to actually carry out the left wing policies he promotes on the campaign trail.

In reality, Obama has done things with regard to terrorism that the liberal press would never have allowed Bush to get away with, such as the murder of al-Awlaki. On other things, however, such as court appointments, healthcare and immigration, he is far to the left of Bush.

The difference between Obama and Romney is that Obama believes he shouldn't be able to take advantaage of tax breaks his level of earning allows or pay an effective lower rate. Romney thinks this is just fine and says he's paid everything he's legally required. Anyone bringing up his lower effective tax rate is just envious of success and stirring up class warfare. I'm surprised he doesn't point out how his, and others, wealth saves jobs by keeping those essential tax attorneys from unemployment.

I'm not so sure that Obama isn't taking advantage of tax breaks his level of earning allows. Mitt's earning level allows more tax breaks. Why? The more money you have, the more you can do with it, which gives you the opportunity to get into tax-advantaged situations. I don't think ideology has that much to do with it.

Obama's new tax plan will leave him paying more. Romney's plan will leave HIM paying MUCH less. Of course no one is blaming anyone for taking advantage of tax laws to pay less taxes, but the wealthy have gamed the system so that they have more & more tax breaks that are out of the reach of the middle class.

I never realized until I'd read the most recent Jimmy G post not only how unfair this country is toward conservatives but how impossible it is for conservatives to have a fair shot at getting their message out. If they could only just express their views … somehow ... why then, everyone would vote Republican!! If only people just knew what Republicans stood for.

But that is, alas, impossible. There are no liberal blogs where conservatives can test their views with their opponents. In fact, there are no conservative blogs either--or [air quotes] “web sites”-- where they discuss their views with the like-minded. What’s more, there are no television or radio news stations that broadcast predominantly conservative points of new; certainly no prominent a.m. radio talk show hosts who take calls from the public and speak freely about Republicans and The Democrat Party.

Conservatives cannot speak persuasively to friends or family members. Their lips have been sewn shut, don’t you understand?? They are not allowed to write letters to politicians, or email letters to the editor. They cannot hand out pamphlets—anywhere!! Grassroots campaigns are against the law—even if there were such a thing!!

It’s worse than you think!! There is no such thing as an election in America; even if there were, conservatives would be prevented from voting for candidates who reflect their views (probably by scary people loitering around the polls). But it doesn't matter, because there simply are no candidates who reflect a conservative viewpoint for whom to vote, anyway. We haven't even had a Republican president in, like, ever!! There are no Republicans or conservatives in Congress, much less conservative representation on local, state, federal court and certainly not on the Supreme Court.

For God’s sake, there aren’t even any conservative religious leaders in this country. Each right-winger is a forlorn reedy voice, crying out into the void where their words are sucked up into oblivion, never to be heard by any human soul. Don’t you see how unfair this is??

"there are no television or radio news stations that broadcast predominantly conservative points of (view)."

Yes but they are dwarfed by the mainstream media. The mainstream media are overwhelmingly liberal. NBC is farther left than Fox News is right. I don't think anyone seriously disputes the liberal bias of the press.

Jake Tapper:
"I have said before… [that I] thought the media helped tip the scales. I didn’t think the coverage in 2008 was especially fair to either Hilary Clinton or John McCain....Sometimes I saw with story selection, magazine covers, photos picked, [the] campaign narrative, that it wasn’t always the fairest coverage."

I wasn't implying Obama didn't tale advantage of tax breaks he's entitled to; he believes the wealthy shouldn't have so many of them, effectively lowering their tax rates. Yes, the more you have, the greater the ablity of your tax lawyer to find ways to protect your wealth, in part thanks to the generous efforts of Congress and the previous president.

@Kip: Liberals dominate college faculties as well. Up to 90% of social sciences and humanities professors vote Democratic. If you don't believe me, look at the recent post re campaign donors and the four universities whose faculties are donating to Obama. That's just the tip of the iceberg.

What's the point? The point is the there is virtually no conservative viewpoint amongst the people who are educating college students.

""It has to do with his basic belief about how the individual relates to the state. In his "You didn't build that" speech, Obama stated his philosophy -- similar to that of Elizabeth Warren -- that anything you earn rightfully belongs to the government and that you can have any portion of your earnings that the government deigns to let you keep.""

Well, only if you read them wrong and only look at half of the thought.

The concept -- businesses (as well as individuals) benefit from the things that we all pay for. Those things include roads/highways/transportation infrastructure, public education (even if you didn't partake, chances are some of your employees did and do), the electric grid, school loans...

But, you know, if you want to play the gotcha game, Romney's got plenty of stupid remarks that can be taken out of context (I like to fire people, for instance).

And, since he is a MSM lackey, he's obviously understating the effect, due to his own liberal bias!!

Jeebus, who watches the network news, anyway?

And, what no one seriously disputes, Jimmy, is that most of the press are liberals. There is plenty of dispute about whether they--as a whole, as opposed to certain individuals and certain outlets--produce biased coverage.

Or, are we now to assume that all "gatekeepers" who have personal viewpoitns allow said viewpoints to control their decision-making? Are all judges simply biased, and should recuse themselves from political decision-making, because that bias might taint the process?

As has been discussed here many times, Obama had a plan in front of him, devised, on his request, by Simpson and Bowles, which eliminated many tax loopholes in return for marginal tax cuts but Obama tossed it in the trash. He had a chance to make a genuine compromise eliminating loopholes but he passed on it.

"I believe that, if Obama had submitted it to the entire Congress -- which he never did, despite what Wendy claims --"

This is true and correct (well, except for the Obama submitting it part, but that's a relative nit). Obama never asked Congress to consider S-B as an entirety.

"there was a good chance it could have passed."

HAHAHA! You're a funny guy. See the following:

"Indeed, Rep. Paul Ryan rep. Paul Ryan, who served on the Simpson-Bowles commission, cast one of the pivotal “nays” on Dec. 3, 2010, that kept the proposal from being referred for debate and guaranteed a vote in Congress."

There's NO WAY that S-B was going to pass, *especially* if Obama had put his weight behind it. Beyond even the distaste for tax increases, the Rs were NOT going to give Obama a win. Which is, largely, why Obama kept quiet about S-B--he wanted it to pass, but knew that his support made it less likely.

"There's NO WAY that S-B was going to pass, *especially* if Obama had put his weight behind it. Beyond even the distaste for tax increases, the Rs were NOT going to give Obama a win."

I happen to think you are wrong. I think it might have passed. It certainly would have gotten more votes than the budget he actually submitted, which was rejected 99-0 in the Senate. He could have submitted it and, if the Republicans voted against it, he could have shown them to be obstructionist.

I believe most Republicans would have favored it. I think Obama chose not to submit it because it was contrary to the class struggle strategy he preferred to pursue. If it had passed, he could no longer demonize the 1%. He never really wanted any sort of compromise. He would rather demagogue the issue.

"The concept -- businesses (as well as individuals) benefit from the things that we all pay for. Those things include roads/highways/transportation infrastructure, public education (even if you didn't partake, chances are some of your employees did and do), the electric grid, school loans."

Yes, I understand the concept perfectly well. Any grammar school student know that the government builds the roads. What is the point of him saying it? His point was that, if you are successful, the government has a claim on your success. This is a socialist concept pure and simple. Capitalists do not believe this.

When people wanted to leave the Soviet Union in the 1980's, the government demanded that they reimburse the country for their education and all the wonderful things the workers paradise had provided them. That is how socialists think. They think the government owns you.

@Jimmy G
"es, I understand the concept perfectly well. Any grammar school student know that the government builds the roads. What is the point of him saying it? His point was that, if you are successful, the government has a claim on your success. This is a socialist concept pure and simple. Capitalists do not believe this."

Really? Honestly I don't think a lot of people remember the things that are "paid for" -- I don't think a lot of people know that "red states" tend to suckle at the government teat far more than "blue states" either.

He's saying exactly what he's saying -- I could compare unregulated capitalism to the excesses of any totalitarian regime -- all the money for the powerful and only enough money for the less powerful to eke out a living, but not enough to make them dangerous.

Anyone can play that game.

But Obama is the most middle of the road, we're all in this together, centrist since, well, since Clinton, LOL. And he's to the right of him as well.

The number of compromises made by this administration is certainly overshadowed by the fact that the republicans were intent on stopping anything he did -- even if it had been their idea in the first place.

Don't you understand, Jen? When it's reported that Obama is a centrist or that he's attempting to compromise with Republicans, that's just the LIBERAL MEDIA fawning!!! No one can seriously deny liberal media liberal media liberal media.

You really only can trust what Rush Limbaugh and Sean Hannity says about him. That's where they tell it to you straight, without an agenda. He's the most liberal liberal since liberal liberal!!!!!!!!

Yes, I agree, there are a lot of uninformed people in both red and blue states. That's the point I was making. Uninformed people or purposely obtuse people who believe things like Obama is the most scary, left-wing, socialist, marxist, nanny-stater ever seen in this country or any other.

And there is a great big pipeline of PAC cash keeping those uninformed people misinformed and worked up into a lather via lying ads, too.

"Why should people in Illinois support more federal spending if most of the money goes to red states?"

Because we feel sorry for them. It's done out of pity. A lot of them are too obese to work and have no marketable skills even if they could tentatively hoist themselves off the Barcalounger under their own power. We're doing The Lord's Work when we help those miserable unfortunates. And they can't even thank us ... because the liberal media silences them.

Well, count me out. I do not feel sorry for them. I want federal spending to be cut because, as you say, it is a bad deal for Illinois. We do not have any extra money that we can afford to send down south.

How exactly does the R side's plans (what we can tell of them, that is) do anything to change the ratios? Across the board cuts just mean that the situation stays the same. Tax cuts for the wealthiest and more taxes on the middle and lower just means more people need services and there's less to pay for it with.

Neither of those things addresses that, well, perhaps blue states have a better idea about the importance of education, support systems that work (slightly) better, and the concept of ACTING morally, rather than just spouting off about morals, preferably everyone else's.

So the question becomes why -- which or what factor(s) lead people to be more self-sufficient and better off in general in taking care of themselves?

I don't trust Republicans (as the party is today) to deal in nuance, in real research, in answering hard questions and being ready to change. They deal in ridiculously simplified talking points that often don't line up with reality. (Magical secretions? Mandates about sea-level changes possible? the lying about what happens to Medicare under Obamacare/ACA vs. under Ryan's plan?)

"the lying about what happens to Medicare under Obamacare/ACA vs. under Ryan's plan?"

You do realize, Jen, that if/when the "Ryan plan" affects current seniors' medicare benefits, the Rs will say that the *statute* did not affect their benefits, but the benefits/costs changed b/c of the *market*.

They aren't *actually* lying, they are just hiding facts that they know, but that would be "incovenient" to discuss. Asked a direct question, they'd say (truthfully) "the law changes nothing for current seniors who remain enrolled in tradtional medicare", but when, later, doctor after doctor stops accepting "traditional medicare", the *market* will have affected a change.

"Well, also, vouchers or a "subsidy so you can buy your own insurance" is a HUGE change. It IS the end of anything that could resemble Medicare."

That's only part of it--the way that the "Ryan plan" wouldn't change Medicare is that current seniors would have the *option* of taking the voucher, or retaining "traditional medicare" (TradMedi). As has been pointed out in various places (all, doubtless, with a liberal bias), the lowest risk portion of current seniors are those most likely to find better care for the cost of the vouchers. The higher risk pool will be left behind, and will be a considerably smaller cohort.

As the cohort of TradMedi seniors declines, it becomes more feasible for doctors and health networks to change their acceptance of TradMedi's (generally) lower reimbursement schedule and added regulatory/paperwork requirements, and even to opt out of accepting TradMedi.

This *will* affect at least one current senior (likely to be more than one). When that happens, what verbal gymnastics will be required to explain how that senior's TradMedi coverage was not altered by the "Ryan Plan"?

And now we learn that Gawker runs an elaborate "money laundering" operation off shore. Gawker writers are also hugely pro-union, except for gawker, which is known as a sweat shop. It's always easy to tell other people what to do with their money.

"How exactly does the R side's plans (what we can tell of them, that is) do anything to change the ratios? Across the board cuts just mean that the situation stays the same"

Across the board cuts would mean less money being taken from Illinoisans and sent to people in other states. You have admitted that Illinois gets rooked with regard to how much the feds take and how much we get back, no? If spending is cut across the board, the amount we get shortchanged is reduced.

Doctors are opting out of Medicare in droves right now today. I know seniors who pay a retainer on the side to be sure of getting treatment. The $7 billion that Obama took out of Medicare will only make that situation worse.

@JimmyG
""How exactly does the R side's plans (what we can tell of them, that is) do anything to change the ratios? Across the board cuts just mean that the situation stays the same"

Across the board cuts would mean less money being taken from Illinoisans and sent to people in other states. You have admitted that Illinois gets rooked with regard to how much the feds take and how much we get back, no? If spending is cut across the board, the amount we get shortchanged is reduced."

That's why I used the word "ratio" -- if you have more money in your pocket and they do too, you're still paying more and getting less than they are.

As I pointed out before though, I'm really more interested in solving or fixing underlying problems that lead to unequal distribution. What's needed as a safety net (and how could that be reduced?) What's unequal due to lobbying? What's unequal due to outdated formulas or needs?

Just lopping off some doesn't do anything in the long run -- if problems are exacerbated by the cuts, in a few years the ratios might be even more out of whack.

Tax cuts at the high end would benefit Illinois because there are more high-end earners in a state like this than, say, Mississippi. Tax cuts at the high end would ensure that more money earned in this state would stay here rather than being sent to Washington and redistributed to other states.

About "Change of Subject."

"Change of Subject" by Chicago Tribune op-ed columnist Eric Zorn contains observations, reports, tips, referrals and tirades, though not necessarily in that order. Links will tend to expire, so seize the day. For an archive of Zorn's latest Tribune columns click here. An explanation of the title of this blog is here. If you have other questions, suggestions or comments, send e-mail to ericzorn at gmail.com.
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Contributing editor Jessica Reynolds is a 2012 graduate of Loyola University Chicago and is the coordinator of the Tribune's editorial board. She can be reached at jreynolds at tribune.com.